Bond Market Watch



ShoutingIsLeadership

Well-known member
Joined
Jan 17, 2011
Messages
49,742
Obviously at the 64b we weren't paying 15%.

As it stands we are paying a weighted average of around 3.1%, as a lot of our older debt, from 08/09/10 was borrowed at between 4.4-6%.

From my read of it, once we can refinance at less than the 3.1%, then new debt will be cheaper to finance than the debt it is replacing.

The NTMA have a good chart on this going back 20 years, makes interesting reading.
Historical Debt Interest | National Treasury Management Agency (NTMA)

In 1996 17.7% of tax revenue was needed to service the national debt, and it was falling, falling to just 3.4% in 2007. It rose from there, peaking in 2013, at 19.4% of tax revenue, before falling back to 15.3% in 2015, and a bit below that again in 2016.

In money terms, from 2008 to 2015 we have spent 45b on interest on the General Gov Gross Debt.

Just to give it some context, if debt was a government dept, it would be the fourth biggest, after DSP, Health and Edu!

You're like a pleasant, more human "Taxi Driver"
 

gerhard dengler

Well-known member
Joined
Feb 3, 2011
Messages
46,739
Obviously at the 64b we weren't paying 15%.

As it stands we are paying a weighted average of around 3.1%, as a lot of our older debt, from 08/09/10 was borrowed at between 4.4-6%.

From my read of it, once we can refinance at less than the 3.1%, then new debt will be cheaper to finance than the debt it is replacing.

The NTMA have a good chart on this going back 20 years, makes interesting reading.
Historical Debt Interest | National Treasury Management Agency (NTMA)

In 1996 17.7% of tax revenue was needed to service the national debt, and it was falling, falling to just 3.4% in 2007. It rose from there, peaking in 2013, at 19.4% of tax revenue, before falling back to 15.3% in 2015, and a bit below that again in 2016.

In money terms, from 2008 to 2015 we have spent 45b on interest on the General Gov Gross Debt.

Just to give it some context, if debt was a government dept, it would be the fourth biggest, after DSP, Health and Edu!
Really not interested in discussing parochial stuff like this on this thread, Samson.

This thread was to discuss whether or not we are seeing the bond market change, and if so is that change in the bond markets the start of something much more significant.

Several commentators have been asking the question of late as to whether or not yields increasing is a harbinger of the bond market cracking.
The same commentators suggest that given the level of debt circulating in the bond market that any bond crash would unleash misery (because all other debt instruments are predicated upon the health of the bond market).
 

SamsonS

Well-known member
Joined
Oct 22, 2009
Messages
4,763
Really not interested in discussing parochial stuff like this on this thread, Samson.

This thread was to discuss whether or not we are seeing the bond market change, and if so is that change in the bond markets the start of something much more significant.

Several commentators have been asking the question of late as to whether or not yields increasing is a harbinger of the bond market cracking.
The same commentators suggest that given the level of debt circulating in the bond market that any bond crash would unleash misery (because all other debt instruments are predicated upon the health of the bond market).
Fair enough Gerhard, but surely the relevance is how much rates increase - it was surely inevitable that rates would rise?
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,815
Fair enough Gerhard, but surely the relevance is how much rates increase - it was surely inevitable that rates would rise?
A normalisation of the interest rate environment can only be a good thing. ZIRP has destroyed trillions in pension fund PV.
 

gerhard dengler

Well-known member
Joined
Feb 3, 2011
Messages
46,739
Fair enough Gerhard, but surely the relevance is how much rates increase - it was surely inevitable that rates would rise?
Yeah, it is relevant, Samson.

I'd hoped that we'd discuss whether or not the international bond market is cracking, as opposed to the effect that any cracking would have in respect of Ireland specifically.
(like we've discussed the cost of Irish borrowing through dozens of threads).
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,815
Yeah, it is relevant, Samson.

I'd hoped that we'd discuss whether or not the international bond market is cracking, as opposed to the effect that any cracking would have in respect of Ireland specifically.
(like we've discussed the cost of Irish borrowing through dozens of threads).
Define 'cracking' gerhard. Do you think that a 'bond bubble' will pop?
 

gerhard dengler

Well-known member
Joined
Feb 3, 2011
Messages
46,739
Define 'cracking' gerhard. Do you think that a 'bond bubble' will pop?
I dunno tbh.

I've listened to a lot of commentary about whether or not the bubble has burst.

Guys like Martin Armstrong say the bond bubble is creaking.
Michael Pento says that the market is unsustainable, and he describes the effect of a collapse.

[video=youtube;THy8-2A6p9Q]https://www.youtube.com/watch?v=THy8-2A6p9Q[/video]
 

im axeled

Well-known member
Joined
Nov 24, 2010
Messages
29,289
.632% for The Republic.

Jaysus only a few years ago we could barely borrow 15%+ and were fully funded until next Sunday.
and who do you recon should take the kudos
the taxpayers of ireland
the f.failures for doing a deal with the troika
the trousering party who brought in three of the most vicious austerity budgets ever witnessed in the eu, then sold off the family silver via nama, to subsidise their sales to their favoured purchasers, out mof who made several loopholes in our tax laws to suit some, who told cab to keep their cold hands off the owners of dodgy swiss bank accounts, the same mof who refuses to close tax loopholes which suit big buisness
 

daveL

Well-known member
Joined
Oct 29, 2010
Messages
19,367
And yet we're still not investing in capital projects
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,815
I will just say one thing. All that QE has to go somewhere.
 

VHF

Well-known member
Joined
Mar 29, 2008
Messages
2,932
ECB has gone turbo, buying up crap to save crap. They're clearly trying to keep DB in ICU when in fact palative is needed to cleanse the damn system.
 

gerhard dengler

Well-known member
Joined
Feb 3, 2011
Messages
46,739
I will just say one thing. All that QE has to go somewhere.
Nail on the head, HB.

It seems to me that part of the bond bubble derives from QE.
If the bond market turns bearish (meaning that investors seek to sell the bonds that they own), more QE is probably the only thing which can prevent a collapse of the bond market.
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,815
Nail on the head, HB.

It seems to me that part of the bond bubble derives from QE.
If the bond market turns bearish (meaning that investors seek to sell the bonds that they own), more QE is probably the only thing which can prevent a collapse of the bond market.
Why does it matter if bond yields go up? They are abnormally low. Corporates and sovereigns have refinanced at ultra-low rates.

What's the big deal?
 
Joined
Aug 6, 2007
Messages
22,622
Good for pension schemes.
Have zero faith that money in pension schemes will remain there........................... what is actually backing up assets in pension funds ?

From working in UK in 80's /90's built up an ok pension pot with number of different companies.
When reach age I can remove it then will do so in cash, use that to repay some of buy to let loans.
Need to find a Pension vehicle that will enable me to do all of that.
Plan to hold UK BTLs free of debt, well pension plan may charge 10% int a year on the loans :)
 

gerhard dengler

Well-known member
Joined
Feb 3, 2011
Messages
46,739
Why does it matter if bond yields go up? They are abnormally low. Corporates and sovereigns have refinanced at ultra-low rates.

What's the big deal?
The correlation of rising yields is falling bond prices.

Why would bond prices fall? Bond prices could be falling because too many investors are seeking to get rid of the bonds that they hold. It basically means that investor demand for debt has fallen. And any bond debt that there is out there becomes more expensive (hence the rise in yields).

But the really important point is that every other market (stock, futures, options) are predicated on the fortunes of the bond market.
If the bond market cracks every other market will crack.
 

VHF

Well-known member
Joined
Mar 29, 2008
Messages
2,932
@o1k - Yes Sir, affirmative. Stoke the coals, spin up the global propaganda machine, deception and flawed fuzzy legal basis for a conflict.
 


New Threads

Popular Threads

Most Replies

Top